Chinese oil major CNOOC installed its first turbines at sea and unveiled plans to increase investment in the sector, a year after announcing its offshore wind comeback.

CNOOC will now allocate 3-5% of its annual future Capex to offshore wind development, company president Keqiang Xu said in a briefing on its 2020 business strategy, while admitting that the oil group is still “slowly exploring” its business model in the hotly-contested market.

The statement suggests up to 4.8bn yuan ($697m) could be committed to offshore wind this year, as the firm plans to raise Capex in 2020 to a six-year high, at between 85bn-95bn yuan.

The strategy could see more investments like the one made a year ago that marked CNOOC’s return to the sector – following a previous loss-making effort in 2004 – when it took an equity stake in the 300MW Zhugensha 2 offshore wind project off Jiangsu province.

The first 13 of 67 turbines and a substation were installed in January, Recharge understands from sources in the company.

The CNOOC-invested project has also completed its onshore control centre, with commercial operation of the wind farm expected by the end of this year.

The total investment to build Zhugensha 2 is 5.2bn yuan ($760m) of which CNOOC committed 49%, with the remainder owned by Zhejiang’s local government and the project’s initiator, a private firm with links to China’s leading offshore wind installer Longyuan Zhenhua.

Last year CNOOC set up a Shanghai-based subsidiary, CNOOC Rongfeng Energy, to lead its future investments in renewables sectors.

Rongfeng has since participated in the country’s first offshore wind tender based on price competition for the 200MW Fengxian project off Shanghai, teaming with Shenergy, China Datang and Shanghai Electric to bid.

The four-party consortium lost out to State Power Investment Corp. But CNOOC is still in active pursuit of opportunities across China’s five key offshore wind provinces, Recharge understands.

CNOOC’s Fengxian bidding partner, Shanghai Electric, has secured development rights for 9.5GW in Guangdong province alone, part of which is categorised as deepwater sites that could benefit from the experience of the offshore hydrocarbon producer.

CNOOC’s return underlines the growing enthusiasm of China’s traditional energy players for offshore wind. Recently, the nation’s nuclear powerhouse China National Nuclear Corp (CNNC) secured a framework agreement with Weihai municipal government in Shandong province, looking to invest in the province’s new offshore development sector.

Wind

Chinese oil giant plans offshore wind expansion as first turbines hit the sea